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Analyzing Consumer Markets

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2013 Pearson Canada Inc.

Marketing Management

Canadian Fourteenth Edition

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Chapter Questions

• How do consumer characteristics influence buying behavior?

• What major psychological processes influence consumer responses to the marketing program?

• How do consumers make purchasing

decisions?

• In what ways do consumers stray from a deliberate rational decision process?

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Consumer Behaviour

• Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Marketers must fully understand

both the theory and reality of consumer

behavior.

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What Influences Consumer Behavior?

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Cultural Factors

Social Factors

Personal Factors

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What is Culture?

• Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions.

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Subcultures

• Nationalities

• Religions

• Racial groups

• Geographic regions

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Social Classes

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Upper uppers

Lower uppers

Upper middles

Middle

Working

Upper lowers

Lower lowers

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Social Factors

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Reference groups

Family

Social roles

Statuses

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Reference Groups

• Membership groups

• Primary groups

• Secondary groups

• Aspirational groups

• Disassociative groups

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Family

• The family of orientation consists of parents and siblings.

• A more direct influence on everyday buying behavior is the family of procreation— namely, the person’s spouse and children.

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Personal Factors

 Age

 Life cycle stage

 Occupation

 Wealth

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 Personality

 Values

 Lifestyle

 Self-concept

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Age and Stage in the Life Cycle

• Our taste in food, clothes, furniture, and recreation is often related to our age.

• Consumption is also shaped by the family life cycle and the number, age, and gender of people in the household at any point in time.

• Adults experience certain “passages” or

“transformations” as they go through life.

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Occupation and Economic Circumstances

• Occupation also influences consumption

patterns. • As the recent recession clearly indicated, both product and brand choice are greatly affected by economic circumstances:

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– spendable income (level, stability, and time

pattern), – savings and assets (including the percentage that is liquid), – debts, borrowing power, and attitudes toward spending and saving.

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Personality and Brand Personality

• Personality - a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli (including buying behaviour).

• Brand personality - the specific mix of

human traits that we can attribute to a

particular brand.

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Brand Personality

• Sincerity

• Excitement

• Competence

• Sophistication

• Ruggedness

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Self Concept

• Consumers often choose and use brands with a brand personality consistent with their actual self-concept (how we view ourselves), although the match may instead be based on the consumer’s ideal self-concept (how we

would like to view ourselves) or even on

others’ self-concept (how we think others see

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us).

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Lifestyle and Values

• A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and opinions.

– Marketers search for relationships between their products and lifestyle groups.

• Core values are the belief systems that underlie attitudes and behaviours.

– Marketers who target consumers on the basis of their values believe that with appeals to people’s inner selves, it is possible to influence their outer selves—their purchase behaviour.

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Table 6.2 LOHAS Market Segments

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Figure 6.1 Model of Consumer Behavior

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Motivation

Freud’s	Maslow’s Hierarchy of Needs
Theory
Behavior	Behavior
is guided by	is driven by
subconscious	lowest, unmet need
motivations

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Herzberg’s

Two-Factor

Theory

Behavior is

guided by

motivating and hygiene factors

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Figure 6.2 Maslow’s Hierarchy of Needs

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Perception

• Selective attention

• Selective retention

• Selective distortion

• Subliminal perception

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Learning

• Learning induces changes in our behavior arising from experience.

• A drive is a strong internal stimulus impelling action.

• Cues are minor stimuli that determine when,

where, and how a person responds.

• Discrimination means we have learned to recognize differences in sets of similar stimuli and can adjust our responses accordingly.

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Emotions

• Consumer response is not all cognitive and rational; much may be emotional and invoke different kinds of feelings.

• A brand or product may make a consumer feel proud, excited, or confident. An ad may

create feelings of amusement, disgust, or

wonder.

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Memory

• Cognitive psychologists distinguish between short-term memory (STM)—a temporary and limited repository of information—and long-term memory (LTM)—a more permanent, essentially unlimited repository.

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Memory Processes

• Memory encoding describes how and where information gets into memory.

• Memory retrieval is the way information gets out of memory.

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Figure 6.3 Hypothetical Dole Mental Map

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Figure 6.4 Five- Stage Model of the Consumer Buying Process

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Problem Recognition

Information Search

Postpurchase Behavior

Evaluation of alternatives

Purchase Decision

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Sources of Information

Personal

Commercial

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Experiential

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Figure 6.5 Successive Sets in Decision Making

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Table 6.4 A Consumer’s Brand Beliefs about Laptop Computers

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Figure 6.6 Steps Between Alternative Evaluation & Purchase

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Non-Compensatory Models of Choice

• Conjunctive

• Lexicographic

• Elimination-by-aspects

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Perceived Risk

• Functional

• Physical

• Financial

• Social

• Psychological • Time

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Figure 6.7 How Customers Use or Dispose of Products

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Moderating Effects on Consumer Decision Making

• The manner or path by which a consumer moves through the decision-making stages depends on several factors, including the level of involvement and extent of variety seeking.

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Decision Heuristics

• Availability

• Representativeness

• Anchoring and adjustment

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Framing

• Decision framing is the manner in which choices are presented to and seen by a decision maker.

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Mental Accounting

• Consumers tend to…

– Segregate gains

– Integrate losses

– Integrate smaller losses with larger gains

– Segregate small gains from large losses

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